Petroleum Basics 101 - Weebly



Petroleum Basics 101

The word petroleum generally refers to crude oil or the refined products obtained from the processing of crude oil (gasoline, diesel fuel, heating oil, etc.) We find petroleum products in every area of our lives. They are easily recognized in the gasoline we use to fuel our cars and the heating oil we use to warm our homes. However, petroleum-based components are also used in plastics, medicines, food items, and a host of other products

HOW OIL WAS FORMED

Oil was formed from the remains of animals and plants that lived millions of years ago in a marine (water) environment before the dinosaurs.   Over the years, the remains were covered by layers of mud.  Heat and pressure from these layers helped the remains turn into what we today call crude oil.  The word "petroleum" means "rock oil" or "oil from the earth."

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WHERE WE GET OIL

Crude oil is a smelly, yellow-to-black liquid and is usually found in underground areas called reservoirs.  Scientists and engineers explore a chosen area by studying rock samples from the earth.  Measurements are taken, and, if the site seems promising, drilling begins.  Above the hole, a structure called a 'derrick' is built to house the tools and pipes going into the well.  When finished, the drilled well will bring a steady flow of oil to the surface.

Over one-fourth of the crude oil produced in the United States is produced offshore in the Gulf of Mexico. The top crude oil-producing states are: Texas, Alaska, California, Louisiana, Oklahoma

The amount of crude oil produced (domestically) in the United States has been getting smaller each year.   However, the use of products made from crude oil has been growing, making it necessary to bring more oil from other countries.  About 59.5 percent of the crude oil and petroleum products used in the United States comes from other countries.

OIL

The Middle East is central to U.S. interests because of oil. The region produces one-third of the world’s oil, and has 60 percent of the world’s known oil reserves (see Chart 1). The United States is by far the world’s largest single consumer of oil, accounting for 26 percent of total world oil consumption (see Chart 2). In 2005, 21 percent of U.S. crude oil imports came from the Middle East. Seventeen percent of U.S. oil imports during this year came from the volatile Persian Gulf area.

OIL

The Middle East is central to U.S. interests because of oil. The region produces one-third of the world’s oil, and has 60 percent of the world’s known oil reserves (see Chart 1). The United States is by far the world’s largest single consumer of oil, accounting for 26 percent of total world oil consumption (see Chart 2). In 2005, 21 percent of U.S. crude oil imports came from the Middle East. Seventeen percent of U.S. oil imports during this year came from the volatile Persian Gulf area.

For decades, the U.S.’s heavy reliance on Middle Eastern oil has been a concern for U.S. administrations. When Iraq invaded Kuwait in 1990, the oil reserves under Iraq’s control increased from about 10 percent of the world’s known oil reserves to about 20 percent. This was a major reason why the United States responded so forcefully. When the United States went to war against

Iraq a second time in 2003, some again saw oil as a motivating factor.

In mid-2005, instability in the Middle East and sky-high oil prices led to intensified calls in the United States to reduce the country’s dependency on foreign oil. Instability in the Middle East not only contributes to high oil prices, but also causes the United States to spend billions of dollars for military deployments designed to protect the free flow of oil. Critics also argue that oil sales help fund authoritarian Middle Eastern governments that give rise to anti-American sentiment and support terrorism. Environmentalists point to global warming and stress the need to reduce consumption and to develop alternative sources of energy.

OPEC (Organization of the Petroleum Exporting Countries): An intergovernmental organization whose stated objective is to coordinate and unify petroleum policies among member countries. OPEC was founded with a goal to unify and manage its members' petroleum resources. The organization sets production rates, which helps OPEC control world petroleum prices . The largest oil deposits in the world are in the Middle East. Several members of the 11-member Organization of the Petroleum Exporting Countries (OPEC) are located in the region. In 2000, OPEC's 11 countries produced 40 percent of the world's oil. Of all the proven global crude oil reserves, more than 77 percent of it lies under the soil of

member nations.

OPEC Member Location OPEC Member Location OPEC Member Location

Algeria Africa Indonesia Asia Iran Middle East

Libya Africa Iraq Middle East Kuwait Middle East

Nigeria Africa Qatar Middle East Saudi Arabia Middle East

United Arab Emirates Middle East Venezuela South America

1. What does OPEC stand for?

2. What is the major purpose of OPEC?

3. How does OPEC try to accomplish this goal?

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Products refined from a single barrel of oil include

The world's top five countries, listed by known petroleum reserves are:

1. Saudi Arabia 264.3

2. Canada 178.8

3. Iran 132.5

4. Iraq 115

5. Kuwait 101.5

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